The coronavirus crisis could lead to unemployment of up to 10 percent in the Czech Republic, the minister of labour and social affairs, Jana Maláčová, told Monday’s edition of Hospodářské noviny. In anticipation of a wave of layoffs, her department is preparing changes to help fresh job seekers re-enter the labour market.
However, that figure is likely to climb to 7 percent, Ms. Maláčová told the business daily.
Experts from the recently revived National Economic Council of the government, popularly known by the acronym NERV, have an even gloomier outlook.
They are warning that the crisis could result in one in 10 members of the labour force being out of work, the minister said.
Hotels and restaurants have been allowed to reopen following the lifting of government restrictions but are struggling to regain the trust of clients, Hospodářské noviny said.
To date such businesses have been kept afloat by government programmes such as Antivirus, which helps entrepreneurs and enterprises hold on to staff by covering part of their salaries.
However, the Antivirus scheme will come to an end at the close of August, so the government has no alternative but to brace itself for a wave of layoffs.
With income tax set to fall and unemployment benefits bound to shoot up, the minister of finance, Alena Schillerová, has said the government will increase the budget deficit for this year to CZK 500 billion.
The country’s labour offices are already working flat out, with staff having to come in at weekends, and if the jobless rate does get to 10 percent, they will come under even more pressure.
For this reason Minister Maláčová is planning changes to help the service handle the influx.
She told Hospodářské noviny that labour offices would focus on their core agenda, while a new plan for boosting employment will be presented by the end of this month. In addition, the state’s active employment policy will be modernized.
Up to now, somebody had to be actually out of work before registering at an employment office, which Ms. Maláčová said caused lengthy queues and stress.
Under the proposed changes, people who have been given notice can sign up even while still in their jobs.
The minister said this would allow them to start looking for new positions immediately, rather than spending hours in queues at the start of every month. What’s more, Ms. Maláčová told Hospodářské noviny, fresh job seekers should in future encounter less red tape.
The recent situation, in which wage compensation was transferred to employers unwilling to let staff go, proved that labour and social security office databases could be linked, she said.
This will mean that officials will in future require fewer stamps and forms from those registering as jobless.